The Need for a Comprehensive Energy Survey

The geological substrate of Earth has barely been explored for its vast energy and mineral riches. The tools for geological exploration of the planet are still in the early stages of development, just as the tools for economical mining and production of the planet's mineral wealth are still being developed.

Fortunately, a few political leaders see the need for a comprehensive survey of energy resources, and have laid out plans to carry out such a crucial enterprise.

Although, the U.S. Geological Survey, a scientific bureau within the United States Department of Interior, does a remarkable job assessing domestic energy resources, much of its analysis and assessment is based upon scant, decades old data that possesses a high degree of uncertainty.

The complicated scheme of describing our estimated resource base combines statistical assessment, technological capability, and the economics of production only to baffle the public and confuse government officials tasked to divine an energy strategy.

If we are going to make sound decisions about our energy future, we sorely need credible, scientifically reliable data about the country’s resource base. The data gathering should not only include oil & gas, but also coal, uranium, water, wind, and geothermal resources. _JohnHRitcko

One example of an aggressive approach to exploration of North American energy reserves comes from US presidential candidate Mitt Romney:

Romney's oil and gas plan is often deemed one of the most aggressive in presidential history, which is great for energy investors, at least.

According to the PDF summary of his plan:

Directs the Department of the Interior to undertake a comprehensive survey of American energy reserves in partnership with exploration companies and initiates leasing in all areas currently approved for exploration... Directs the Department of the Interior to implement a process for rapid issuance of drilling permits to developers with established safety records seeking to use pre-approved techniques in pre-approved areas

Companies poised to benefit from this include, well, oil and gas companies, especially service companies. Rig Zone explains:

Republican Presidential nominee Mitt Romney's proposed energy plan could be positive for the oil services and drilling industry, with its goals of streamlining and improving the permitting process, opening up new areas for drilling and boosting overall drilling activity, according to a recent research note from Barclays Capital.

Seismic companies and eventually offshore drillers could benefit from Romney's plan to open acreage offshore Virginia and the Carolinas for exploration, Barclays analyst James C. West said in the Aug. 24 research note.

_Seeking Alpha

PDF Summary of Romney's aggressive energy plan

Many politicians are timid about energy in the age of a media-driven carbon hysteria. Some like to play it safe to avoid media and faux environmental criticism, investing taxpayer funds in intermittent unreliable forms of energy such as big wind and big solar. But that is the path to energy starvation.

Smarter and wiser leaders understand that in order for advanced societies to survive to reach an age of clean abundant energy from advanced nuclear engineering designs, they will need to efficiently utilise existing plentiful sources of reliable energy -- such as conventional and unconventional oil & gas, coal, bitumens, kerogens, gas hydrates etc -- while at the same time developing next generations of energy and fuels of all kinds, particularly advanced nuclear.

The faux environmental path of carbon hysteria is the path of energy starvation, decline, and a a world in decay. Citizens of democratic societies can make a choice as to the path their societies will follow.

Obama's Energy Starvation Agenda: Still Killing Jobs

... the most activist Department of the Interior in our nation's history is trying to change the rules and seize from Exxon Mobil one of the largest oil finds ever in the Gulf of Mexico. I thought that we were a better country than that. The Department of the Interior under the Obama administration has cost this country hundreds of thousands of jobs with their regulatory overreach. Not only has their ban on offshore drilling cost us thousands of jobs, it now appears that they are trying to take back leases from Exxon Mobil on a never before used technicality that will steal billions of dollars of profits from this US corporation that has acted in good faith. _FXStreet

Mr. Obama's agenda of national energy starvation continues to generate an economic recession without end. The Obama regime's relentless attacks against coal, oil sands, shale gas and oil, offshore oil, nuclear, oil shale kerogens, and every conceivable form of energy which is reliable and affordable are helping to destroy the US economy, bit by bit.

The ongoing battle between the Obama - Salazar US Department of the Interior, and Exxon Mobile, over billions of barrels of oil in the Gulf of Mexico Julia field, is a prime example:

ExxonMobil, and its Norwegian partner Statoil made the biggest discovery of all — a field worth a billion barrels of oil — 7,000 feet below sea level in its "Julia" field in 2007.

Exxon tried to keep its discovery secret to keep marauders away. Sadly, the pirates in this instance are U.S. regulators — and their aim is to stop them.

That's right: Instead of marvel at the continuing treasures of the New World, or hail the human ingenuity that made retrieval of so much oil possible, or simply quantify how this discovery will boost U.S. energy security, Interior Department bureaucrats moved instead to snatch Exxon's permits and shut the whole thing down.

...in the Obama era, which demonizes oil production in American waters by American companies, the bureaucrats came up with this permit technicality to effectively expropriate the entire operation.

Exxon is now fighting the permit action in a federal court in Lake Charles, La., calling it "arbitrary," "capricious" and "an abuse of law." It's also a textbook case of the anti-business climate fostered by the Obama administration which should be bending over backward to help Exxon create jobs and profits. _IBD

Obama should be helping Exxon to create new, lucrative US jobs, to help boost the depressed Gulf of Mexico and national economies. Instead, the regime is pursuing -- energy starvation.

Exxon has been keeping this huge oil find a secret, and is only coming out in the open due to the need to sue the Obama regime in court, in order to maintain its right to develop the Julia field.

... the fact that Exxon had made perhaps the largest discovery ever in the Gulf, and one of the largest in the company’s century-long history, wasn’t revealed until it sued the Interior Department in a Lake Charles, La., federal court last week over leases for the oil.

The find was made in 2007, and Exxon and Statoil did disclose it in January 2008, calling it significant. But the possibility of one billion barrels wasn’t spelled out.

... Exxon had kept mum on two 2009 and 2010 discoveries in the Hadrian prospect until it could resume drilling in the area after the end of a months-long exploration moratorium. Last June, after it found a third prospect that confirmed the area contained 700 million barrels of recoverable oil and gas, it announced the finds with great fanfare.

But Exxon’s reluctance to talk openly about the huge 2007 find, known as the Julia field, was also a result of circumstances. The oilthat Exxon found there is in a deeply buried layer of rock known as the Lower Tertiary, which is far from shore and requires large investments in pipelines and remote platforms. So Exxon may not have known for a while how much oil it could get out of the ground, or whether it had the technology to do so, say analysts who have talked with the company _GCaptain

The Julia field likely holds the potential to produce far more than 1 billion barrels, due to the conservative nature of oil geologists when quantifying reserves, and due to the "long tail" phenomenon of oil field production over time.

There are undoubtedly many more "billion barrel fields" sitting around, waiting to be found by competent, ambitious, and "hungry" oil explorers and prospectors. Some of them will be far offshore, such as Julia. Others will be in shallower waters or on land, but perhaps lying deeper beneath the surface.

Over the next 20 years, proven global oil reserves are likely to continue growing. Most of this growth in proved reserves will come from improved drilling and recovery technologies, in previously discovered fields. But as oil exploration technologies continue to develop and improve, expect large new oil field discovery to ramp up once again.

Peak Oil Confronts Peak Idiocracy: What to Do?

Offshore Oil InstallationsPolitical restrictions on international oil drilling by OPEC, Russia, and other national oil companies and dictatorships is driving international companies to drill in more extreme environments. Extreme offshore drilling is likely to increase for this reason, and because that is where most of the new giant oil fields are likely to be found. Such a movement into an extreme environment is becoming more difficult as the world confronts "peak manpower" -- which is the inevitable mirror image of "peak Idiocracy."

Due to differential birthrates and other global demographic change, the global average population IQ is dropping from near 90, ever closer to 85, then toward 80. In order to competently operate a high-tech infrastructure, a population needs to have an average IQ of 90 or above -- due to the nature of the IQ distribution, and the demands of high-tech jobs on a human brain. Energy operations -- particularly in extreme environments -- require competency and a minimal intelligence in order to avoid disaster. Many of the richest seafloor oil fields lie offshore of countries with some of the lowest average IQs, globally. Shipping in outside workers is the obvious answer, but there is a limit to the number of competent workers who are in the training pipeline, again due to global demographics (and horrendous political decisions).

Evolution of Offshore PlatformsOffshore rigs have gotten better over the years, but they still require extensive human manning and oversight. In difficult operations, disaster is only a breath of inattention away. The oil industry has therefore been developing robotic seafloor drilling equipment which can move much of the danger far away from rig workers. Such equipment can also reduce the numbers of highly trained, highly intelligent technicians to oversee operations.

Robotic Seafloor Oil Drilling InstallationNew robotic rigs will be used for both exploratory and production purposes. Here is more information about an exploratory seafloor robot:

This new exploration rig is unlike any other. The design allows it to be operated on the ocean floor, uninhabited, enabling safer exploration of ultra-deep water and arctic regions that are both difficult and sometimes impossible to access with traditional rigs.

Seabed Rig AS has designed intelligent robots, controlled using software provided by Cambridge, Massachusetts firm Energid Technologies Corporation.

"The software was originally developed for NASA and the National Science Foundation for controlling complex robotic systems," says Neil Tardella, COO of Energid. "We are leveraging this software to build the most intelligent rig of its kind."

With an automated rig, workers are kept from immediate harm, and human error place a much less critical role in its operation -- the source of several major incidents in the past. "Robots do not get tired and make mistakes," says Roald Valen, Robotics and Control System Manager at Seabed Rig. "They do not get hurt."

For safety, the Seabed rig employs a patented encapsulated and pressure compensated design, giving an environmentally friendly solution with zero discharge to the sea. "Our aim is to make the rig both safer and more effective than any exploration rig currently in use," says Kenneth Mikalsen, CTO of Seabed Rig. _GreyGoose

Similar rigs will be used for mining of minerals and mining of oil&gas. The aim is to move the danger away from workers, while at the same time eventually reducing the necessary numbers of top level technicians -- using increasingly autonomous robots supervised by increasingly centralised and multi-tasking remote technical overseers.

It is imperative to remove oil operations far away from African populations -- where insurgencies, corruption, and dangerous petty thievery associated with pipelines and wells can leave tens of thousands of people dead every year, costing tens or hundreds of millions of dollars to oil company operations.

Placing operations thousands of metres under the sea -- with supervisory facilities away from insurgencies and corrupt officials -- can save lives and money. Finding better ways to route pipelines away from populated areas -- and other areas accessible to local populations -- will require careful planning and design.

French oil giant Total has already three subsea gas/liquid separation units off the coast of Angola under 800 metres of water.

The subsea production system for Pazflor’s three Miocene reservoirs includes three subsea separation units. Each one consists of four retrievable packages: a gas-liquid separator; two hybrid pumps to boost the liquids; and a manifold to distribute the effluents to the separator and pumps. Purpose-designed for Pazflor, the hybrid pumps are another first. They combine multiphase stages, compatible with the presence of gas in the liquid, and a centrifugal stage, to improve efficiency.

Fabrication of the SSUs, completed in 2010, entailed nearly 350,000 man-hours of work.

Both systems—the standard production loop for light oil and the new subsea separation technology—will be connected to a single Floating Production, Storage and Offloading (FPSO) vessel. _GCC

The Idiocracy is coming, but the global demand for energy will continue to be high as long as high tech infrastructure in global cities and industrial nations can be maintained. This places world energy companies in a squeeze, of sorts, as qualified workers become scarce at a faster rate than demand for product falls off.

Corrupt national governments will continue to institute restrictive taxes, regulations, and ultimately nationalisation -- as the situation on the streets becomes worse.

This is not peak oil, as conventionally understood. The reserves are still there, but the competent manpower required to access the reserves is shrinking away for political and demographic reasons. There will concomitantly be a shortage of advanced materials required to access extreme resources, likewise due to peak manpower and poor national planning. Political peak oil.

It is never too early to plan for dealing with the fallout from bad government and a slipshod sociological transition. Never underestimate the stupidity of your leadership. You are responsible for yourself and your family, no matter what they tell you.

Growing Boom in Sub-Salt and Unconventional Oil Reservoirs

You can call it subsalt exploration, presalt exploration or whatever makes you happy.

Just don’t forget to call exploration beneath salt bodies a big deal.

These plays are not new, yet the announcement of the giant Petrobras-operated Tupi field presalt oil discovery in 2006 offshore Brazil in the Santos Basin triggered major excitement in the E&P community and elsewhere. _AAPG.org

AAPG.org
It seems that these finds are just getting started -- and are putting Brazil on the "big-oil" map big time.

Brazil has a sunken treasure off its shores… though not the type Jack Sparrow [That's Captain Jack Sparrow to you!] might seek.

Instead, it is stashed beneath miles of water, rock and layers of salt beneath the ocean’s floor. And these so-called “pre-salt” oil fields make for the biggest oil discovery in the Americas since the 1970s.

Brazil’s oil regulator estimates they contain about 50 billion barrels of oil equivalent. That’s more than enough to turn Brazil into one of the world’s top oil producers in this upcoming decade. _InvestmentU

As you know, Brazil's offshore oil riches derive from vast fields of algae that have been well-fed by nutrients from the Amazon for many tens of millions of years. One might expect similar rich fields in the Gulf of Mexico, similarly fed by the Mississippi for many tens of millions of years. A lot of drillers happen to be chomping at the bit for the lead-footed (and perhaps lead-poisoned) Obama regime to lift its energy-starvation policies so that they can go after those rich fields.

McMoran Exploration (MMR) remains convinced that there are still good ultra-deep oil and gas prospects at shallow depths in the Gulf of Mexico. That exploration is still in its infancy, though, and it’s far from clear that these high-risk, sub-salt reserves can ultimately be recovered at economically attractive costs.

...Simply put, management believes companies like Exxon just didn’t dig deep enough. McMoran’s drilling strategy is focused on extracting reserves thought to exist below the “salt weld” — specifically, hydrocarbon-bearing sands in the “deep gas plays” (depths of 15,000 to 25,000 feet) and “ultra-deep gas plays” below 25,000 feet. _bnet.com

Given the geologic history of the region, such deep finds are not beyond reason. But since the Obama administration is dragging its feet on offshore drilling, that puts more pressure on unconventional wells to produce. And these wells appear to be more than up to the challenge.

...analysts predicted that the new activity, centered on so-called unconventional reservoirs, could greatly boost domestic oil production and help offset declining output in Alaska and the Gulf of Mexico.

These reservoirs, trapped in tight shale-rock formations, were deemed too hard to crack a decade ago. But in the past two years, breakthroughs in drilling technology, combined with high oil prices, have led companies like Chesapeake and Petrohawk to switch rigs formerly devoted to drilling for natural gas to emerging oilfields like the Eagle Ford shale formation, which stretches from the outskirts of Houston and San Antonio, Texas, south into Mexico.

...The Eagle Ford experienced a more-than-tenfold increase in the number of wells drilled last year over the 94 completed in 2009 and is slated for even more development this year. And the trend is playing out nationally, in formations such as the Bakken Shale in North Dakota and the Monterey Shale in California.

Oil production from these sources is expected to reach 1.5 million barrels a day by 2015 from fewer than 500,000 barrels a day now, according to energy consultancy Wood Mackenzie. That is similar to the amount of crude produced in the offshore Gulf of Mexico, and the equivalent of nearly 30% of current U.S. production. That extra million barrels per day could help replace some expensive oil imports as conventional oilfields in the rest of the country decline. _Rigzone

Of course Obama's EPA is doing everything it can behind-the-scenes to shut down unconventional oil and gas. That is simply part and parcel of what it means to press a policy of "energy starvation." Just part of being lefty-Luddites no doubt. In the same way as they have shut down offshore oil drilling, the Obama regime is also overtly and covertly working on shutting down coal mines, coal power plants, Canadian oil sands, Green River oil shale, and is dragging its feet on certifying and permitting safe, new, reliable nuclear reactors.

The only kind of energy the Obama administration seems to like, is the unreliable and exorbitantly expensive kind -- solar and wind. It's not enough for Europe to be suffering for its foolish eyes-closed dive into the shallow rocky bottoms of wind and solar power. Obama simply must force the same suicidal approach on the US, while he still has the chance.

Unfortunately for the Obama-suicidal administration, the executive branch is not the only branch of the US government. And in the lower house of the legislative branch, a new pro-energy sheriff just rode into town ready to kick ass and take names. And if that sheriff fails to do the job, there are several others waiting and ready to get the backing of the US Tea Party factions, to do it for them.

There is plenty of oil, plenty of coal, plenty of gas, plenty of fissionable fuels . . . Unfortunately, there are also plenty of lefty-Luddites of the dieoff.orgy persuasion, who want to force their suicidal derangement onto everyone else. I suspect that enough people will wake up before that happens, who will show these Luddites to the edge of the cliff and invite them to take the first plunge.

Why Is China Trying to Disrupt Western Oil & Gas Production?

According to the report, the intruders used widely available attack methods known as SQL injection and spear phishing to compromise their targets. Once they gained access to computers on internal company networks, they would install remote administration software that gave them complete control of those systems. That made it possible for the intruders to search for documents as well as stage attacks on other computers connected to corporate networks.

In addition to their parallels to the Google attacks of last year, the intrusions resembled a Chinese-based electronic espionage network that was found in 2009 and named GhostNet. In that case, researchers at the Munk Center for International Studies at the University of Toronto uncovered an elaborate network aimed at government computers as well as those of nongovernmental organizations like the office of the Dalai Lama. The researchers concluded that the control servers of the attack system were based on the island of Hainan, which is part of China. _NYT

It is bad enough that tin-pot oil dictatorships such as Venezuela and Russa systematically lure international oil&gas companies into partnerships -- only to nationalise all of the multinational's in-country assets. Over and over again. Now China has been caught red-handed attempting to use computer hacking tools to disrupt multinational oil & gas operations. What is in it for the Chinese?

At least five multinational oil and gas companies suffered computer network intrusions from a persistent group of computer hackers based in China, according to a report released Wednesday night by a Silicon Valley computer security firm.

...Operating from what was a base apparently in Beijing, the intruders established control servers in the United States and Netherlands to break into computers in Kazakhstan, Taiwan, Greece and the United States, according to a report, “Global Energy Cyberattacks: ‘Night Dragon.’ ”

The focus of the intrusions was on oil and gas field production systems as well as financial documents related to field exploration and bidding for new oil and gas leases, according to the report. The attackers also stole information related to industrial control systems, the researchers noted, but no efforts to tamper with these systems were observed.

McAfee executives declined to name the victim companies, citing nondisclosure agreements it signed before being hired to patch the vulnerabilities revealed by the intrusions. Last year, when Google announced that intellectual property had been stolen by Chinese intruders, it expressed frustration that while it had observed break-ins at a variety of other United States companies, virtually none of the other companies were willing to acknowledge that they had been compromised. _NYT

The opportunities for western oil&gas companies seem to be expanding almost exponentially, given new drilling and exploration techniques. Oil & gas production in the US and elsewhere around the world are set to rise as a result, with much growth in exploration and production sectors.

What can China expect to gain from disrupting western and multinational oil & gas enterprises? Is is nothing more than a show of force projection, far beyond Chinese borders? Is it a warning? Or is it rehearsal and preparation for a more integrated effort to disrupt western energy supplies and critical information systems?

China is known for its industrial sabotage, its product counterfeiting, its outright theft of technologies from partners, and its iron-fisted control over information sources and expression inside its borders. Is China experimenting with similar exertion of control over global information streamways, with a hoped-for domination over energy, financial, information, and political flow of data?

Clearly, with China one must never let down his guard.

Extreme Crude: Oil's Impossible Places

Brazil's quest for extreme oil may cost as much as US$ 1 trillion. That is a lot of money to invest in a such a risky proposition -- to retrieve oil that is miles deep underwater. But oil prospectors and producers around the world are on the prowl for extreme crude -- found in places that previous generations would not have dreamed of going.

The hunt for extreme oil proceeds apace in the ultradeep waters off the coasts of Ghana and Nigeria, in the sulfur-laden depths of the Black Sea, under the polar ice caps, and in the gummy tar sands of Venezuela’s Orinoco Basin and Canada’s McMurray Formation (see the related DISCOVER story, "The End of Easy Oil"). The Gulf debacle has shaken national governments, but it has hardly deterred them. Mexico is taking advantage of the fallout from the disaster next door—and the suspension of cross-border prospecting—to buy time for its national oil company, Pemex, which plans to beef up its own deepwater capabilities. A month after Deepwater Horizon exploded, the Australian government reaffirmed its commitment to ocean drilling, putting 31 offshore blocks up for bidding, 17 of them in deep waters. While pundits and regulators issue encomiums to safety, the most noticeable shifts in the “post BP” oil industry are a fat discount on rental rates for offshore platforms no longer needed in the Gulf and the exodus of idled rigs heading to other waters.

...What keeps Petrobras going is the size of the prize. Just the proven reserves in three different Brazilian pre-salt exploration areas total 10 billion to 16 billion barrels, the largest oil discovery in the Western Hemisphere in three decades. And that may be only the beginning. After drilling 13 more test wells, the experts now reckon that the pre-salt reserves sprawl over an oblong slab of more than 57,000 square miles of ocean—Brazilians call it “the blue beefsteak.” And the petroleum there is not the heavy, low-grade stuff that Brazil currently fetches from existing offshore wells, but light, sweet crude, the prize of hydrocarbons, preferred for jet fuel. _Discover

The microbes which created the oil in the Gulf of Mexico were fed ages ago by the land effluent of the Mississippi River basin Not so long ago -- in geologic terms -- Africa and South America were at hailing distance from one another. With a broad continental shelf between them, and with the Amazon feeding from the west and the Congo and other rivers feeding from the east, photosynthetic and other microbes between the continents fed very well indeed.

Those vast fields are relatively recent in origin, as the Earth thinks of time. It will take some good detective work to track down older, more ancient shelfs and feedwaters. But that is what the spirit of extreme crude is all about. That and going ever deeper, and after ever-tougher game.

Geophysicists have known for decades that plenty of oil and gas is hidden away below the oceans, but they were unable to see it clearly with traditional seismic techniques. Because salt is much less dense than rock, the sound waves surveyors use to scour the depths race through it at nearly three miles per second, twice as fast as it traverses the surrounding rock and sand. When sound waves pass from compact rock in the seabed to the pliant salt below, they kick into overdrive, scattering and distorting the seismic waves. The result is a blurry image that geophysicists compare to a snowy television picture, making it almost impossible to define the true size and position of the salt cap.

To sharpen the picture, Petrobras upgraded its toolbox with 3-D imaging. Traditionally, geophysicists take readings by sending sound waves straight down and straight back, creating two-dimensional pictures of slices of the earth that can be “read” like individual pages. But since salt can blur any given seismic image, exploration crews fired their seismic probe from various angles and then put all the images together to produce a three-dimensional view of the salt block. The technology helped them zero in on an intriguing section of seafloor in the little-known Santos Basin, off the coast of southern Brazil. To confirm the findings, Petrobras’s computer engineers have spent years developing software to correct for distortions—both sound wave reflections and seismic noise—that salt introduces in the readings. After multiple 3-D probes, they had a sense that something big was buried under the salt.

BP pioneered the exploration of oil and gas sealed beneath salt domes under the Gulf of Mexico, and potential pre-salt oil reserves of untold dimensions are currently being mapped along the west coast of Africa in the waters of Gabon, Angola, and Ghana. That area is a geologic mirror image of South America’s eastern flank, the two continents having separated when the supercontinent of Gondwana broke apart some 160 million years ago.

But Brazil may be sitting on the largest pre-salt resources of all, meaning that Tupi may represent both the pinnacle and the end point of this type of exploration. Finding and retrieving all this oil (and the associated natural gas) weighs heavily on the balance sheet. The first pre-salt test well took 14 months and cost $240 million, although more recent Petrobras pre-salt offshore wells have cost about $66 million each. Just operating a rig to drill in the pre-salt can cost up to $1 million a day. Industry insiders estimate that retrieval costs for Brazil’s proven pre-salt reserves could run as high as $1 trillion. _Discover

As geologists get better at finding oil and gas that require newer horizontal drilling approaches, engineers will develop yet newer approaches to finding and producing from even tougher deposits. It is a progression that is demanded by modern day economic and political factors which dominate the price of oil -- rather than by any meaningful or impending shortage of liquid fuels.

Bill Gates Jumps Into Oil Exploration; Brazil's Reserves to Double?

Bill Gates has read the tea leaves, and thinks that there is money in advanced oil exploration technologies.

Microsoft co-founder Bill Gates is tossing his financial support behind a Houston company which hopes to utilize detailed analytics and measurement technologies to take some of the guesswork out of onshore oil and gas exploration. NEOS GeoSolutions -- whose investors include the legendary venture capital firm Kleiner Perkins Caufield & Byers and investment bank Goldman Sachs -- today announced a $60 million investment from Gates and others.

The company touts itself as a "geosciences company where Silicon Valley meets the oil patch," and Gates' involvement certainly adds some big-name technology credentials to the mix.

According to the company's Web site, NEOS can can help oil, gas and mining companies more efficiently explore the Earth's subsurface.

We do this by integrating a broad range of geological and geophysical (G&G) data – including data available in the public domain, owned by our clients, or acquired using proprietary NEOS platforms – to produce a highly constrained 3D model of the subsurface. By applying the latest geostatistical techniques, we help our clients determine which portions of a basin might be the most prospective and, at the lease level, what areas are most likely to contain commercial quantities of hydrocarbons or minerals.

_TechFlash

Brazil's oil reserves may be set to double in extent:

Brazilian oil deposits below a layer of salt in the Atlantic Ocean hold at least 123 billion barrels of reserves, more than double government estimates, according to a university study by a former Petroleo Brasileiro SA geologist.

The research, which set out to show government figures were overly optimistic, found they underestimated the area’s potential, said Hernani Chaves, a professor at the Rio de Janeiro State University who worked at Petrobras for 35 years. The forecast, which the study puts at a 90 percent probability, compares with 50 billion barrels estimated by Brazil’s oil regulator, known as ANP.

“We started with a skeptical view and finished with bigger numbers,” _Bloomberg

Coal to rival oil in energy production by 2030

Green coal may come to India within 2 years

GE to assist Shenhua in providing clean coal technology to China

Renewables bubble bursting in Spain and France. German and Scandinavian power grid managers are not very happy about the renewables bubble either.

The world is floating in hydrocarbon energy resources. Humans in developed societies must choose between the lefty-Luddite dieoff.orgiast philosophy -- as promoted by Obama's merry band of energy starvationists -- or a cleaner and more abundant future of limitless resources released by the unbound human mind.

High Oil Prices Spur Oil Companies to Explore and Produce

Oil is like any other commodity: if price go up, people will produce more of it to sell. Despite the bleatings of peak oil sheep, oil companies are responding to recently elevated oil prices. Many are in fact scrambling to find and produce more oil.

From giants Saudi Aramco and Exxon Mobil Corp. to five-person wildcat outfits, the industry plans to spend nearly a half-trillion dollars next year to find and extract oil and natural gas, according to a new survey by investment bank Barclays Capital.

For the first time in several years, large Western oil companies are leading the industry's charge, increasing their budgets faster than the state-run national oil companies that have dominated spending in recent years.

"This is being driven by the appetite to find more oil, comfort that today's oil prices will be sustained and companies getting out of a hunker-down, recession mode," said James West, an energy analyst with Barclays, who co-authored the survey, which has been produced every year since 1982. _Rigzone

The key question oil executives as themselves is, "Will the high prices of oil stay high?" During the speculative runup in oil prices from 2007-2008, it was clear to most wise analysts that the high prices could not last. And indeed oil prices crashed to relatively low levels in 2009.

Oil has always been a boom and bust industry, with multiple price elevations followed inevitably by price crashes, and so on. That is one reason for the formation of OPEC -- the perceived need to maintain a stable price level for oil.

More on the investing side from Phil McPherson:

With the economy recovering, and as more people feel that the double-dip recession is not going to happen, oil prices are tending to stay stronger. However, it seems to me the tail is wagging the dog right now, with the U.S. dollar going down and the price of bonds being up, and the yield being extremely low. To me, it has more to do with the price of oil than necessarily the pure supply and demand fundamentals, because we still have excess supply of oil via OPEC. If you're bullish on oil or bullish on the economy, then you use those dips as opportunities to gain more exposure.

...But as with any business, when the demand is there and the visibility is there, entrepreneurs rise up to the challenge because they know they can make money. I think you're going to be surprised that in 2011 the likes of Halliburton Co. (NYSE:HAL) and Schlumberger Ltd. (NYSE:SLB), as well as lot of other smaller companies, are going to have more crews out working. There's going to be enough demand there. It's all a function of oil prices, and as long as they are in this relative range, people are going to continue to drill these wells. I don't think margin makes as much of an impact as the NAV that you can grow with these companies via drilling these wells and growing reserves. _IBTimes

The world is floating in hydrocarbons. North American shale gas has barely gotten started, and the technology for repeating that miracle is in high demand worldwide -- from Israel to China to South America.

As long as current oil prices remain above $70 (2010 dollars), exploration and production will continue to accelerate for both oil and wet gas. Higher prices -- above US $80, will spur even greater investment and faster development.

The next time someone tells you there is no flexibility in oil production, and that demand for hydrocarbons absolutely must continue to rise exponentially, you would be wise to bid the person a good day, and seek other companionship.

Bakken and Eagle Ford are Just the Beginning

WSJ
The de facto Obama moratorium on oil well drilling in the Gulf of Mexico has spurred new exploration and production on the US mainland. Local economies are beginning to experience boom times never experienced before. It is a phenomenon that may well spread across the US, as the oil & gas mania locates useful hydrocarbons wherever they are to be found.

For much of this decade, energy companies pioneered new drilling technologies that allowed them to recover natural gas from a subterranean rock called shale. By drilling down and then out laterally, companies were able to exploit greater areas of the shale. And by injecting massive doses of water, sand and chemicals into the ground, they could crack open the gas-bearing rocks, allowing gas to flow to the surface.

...The shale boom won't begin to end American dependence on imported oil, but industry experts say it is driving a significant and potentially enduring shift in the way oil is produced domestically.

"It's a game-changer for U.S. oil production," said Bill Durbin, head of global markets research at Wood Mackenzie. "The U.S. has always been perceived to be a very mature oil province with relatively little prospect for growth. Now we're seeing the declines in production being arrested by the increase in unconventional oil."

Nationally, the balance between oil and gas exploration onshore has tilted heavily toward oil. The number of oil-seeking rigs has nearly tripled since June 2009, and now makes up 42% of all rigs in use, a prevalence not seen since 1997, according to data compiled by oilfield-services company Baker Hughes Inc.

Among states, Texas has seen the greatest increase of rigs in the past year, adding 300, a 73% increase. North Dakota added 83 rigs in the last year, Oklahoma gained 71, and Colorado picked up 30. Analysts at IHS Cambridge Energy Research Associates have identified 20 significant shale prospects across North America.

Industry executives and analysts say the growth is likely to continue, at least as long as oil prices remain over $70 a barrel. _WSJ

Yes, this boom is likely to continue for as long as oil prices remain over $70 a barrel. In other words, as long as demand continues, the supplies will be located -- sometimes where you least expect them.

The Obama - Holdren - Salazar - Boxer coalition of energy starvation will not control the US government indefinitely. When the left-Luddite Malthusians are finally swept from power, a wider array of energy options will be placed upon the table for consideration.

When the energy markets are opened up, it is possible that demand will be insufficient to maintain oil prices at current inflated levels. Sure, the value of the dollar will continue to decline as long as US debt expands exponentially -- which drives the price of commodities higher, when priced in US dollars.

But other, more stable measures of value will come into more widespread use. When priced in more stable currencies, the price of oil is likely to fall in the long run, rather than rise.

The Age of Oil: Just Beginning? Soon to End? Or Both?

Petroleum is thought to have originated mainly from the remains of sediments of photosynthetic organisms which sedimented from ancient seas, and were heated and compressed by geological processes. Assuming that to be true, it is interesting to note that photosynthetic organisms originated almost 3.5 billion years ago. From the chart above, one can note that the Oxygen concentration of Earth's atmosphere rose markedly at about the same time as the origin of cyanobacteria (2.8 gya), eukaryotes (2 gya), and algae (1 gya), respectively.

The higher the oxygen level the higher the rate of sedimentation of photosynthetic organisms, presumably. Note that such sedimentation began to occur nearly 3 gya. Also note that the vast majority of petroleum which humans have begun to tap into, originated roughly 100 mya or more recently. I think you will agree with me that the Proterozoic Era (2.5 gya to about 540 gya) is likely to have been extremely prolific in the sense of laying down organic carbon in sediments.

Now, observe the Tethys Sea in the image (see Tethys Ocean). The Tethys Sea (Ocean) opened about 250 mya and closed about 10 mya. Most of the modern world's known oil and gas reserves lie in the sediments which once underlay the Tethys water masses. Much of this oil and gas is of fairly recent origin, geologically speaking, although some dates back to the early Triassic (250 to 200 mya). It only takes a hundred thousand years or so to make petroleum by natural means, depending upon local geology.

Now, I know you are saying to your computers, "But Al, if we are only beginning to tap a very small fraction of all the oil that has been deposited, where is all the rest of the oil?"

To which I reply, "Where do you think it is? Floating beyond the orbit of Pluto?" No, seriously, a lot of things can happen to oil deposits over time. Some can seep into oceans and be eaten by microbes. Some can be turned into various types of gas, and escape or be adsorbed by minerals. But most of it is likely to have been buried in the constant geologic upheaval of the planet's layers of rock.

The Japanese and Chinese have recently begun finding significant deposits of oil and gas within volcanic rock. Oil geologists are beginning to look beneath undersea volcanic deposits for submerged oil fields of great potential. The Russians have been finding significant petroleum beneath deep igneous and metamorphic layers for many years. The history of oil formation goes back over ten times farther than almost all of the oil humans have retrieved or located so far -- although drops of bitumen has been found in rocks dated between 2.6 and 3.2 gya.

Australian expert in petroleum geology, Associate Professor Colin Ward of the University of New South Wales, says it's not surprising that algae and other simple life forms existed during this early stage of the Earth's history.

What is significant, is that there are now signs they were producing oil.

"He's found good evidence that the processes that generate oil were active in a very early history," he says.

Rasmussen's discovery may have implications for exploration, Ward says.

"It focuses attention back on very old rocks as a possible places to look for more oil and gases," he says. _Source

So why do I say that the age of oil may be ending soon? Because while it takes 100,000 years (plus or minus) to make petroleum by natural processes, it only takes a matter of weeks -- from start of algae crop to harvesting and processing -- using modern methods. Yes, modern oil made this way is very expensive, but that is because we have just begun learning to create it. Within 20 years, Al Fin energy experts assure me that microbial fuels and energy will be fully price-competitive with petroleum, and rapidly scaling to match production within 30 years.

You may hear a lot of talk about "peak oil" in certain circles. The most likely kinds of peak oil you will see are "political peak oil" from bad energy policy or political conflict, and "peak demand" -- when consumers choose other forms of energy and fuel than petroleum. Peak demand can also occur from economic, or other forms of collapse, which we hope does not occur.

The beginning of oil, the end of oil. Mayhaps both.

Previously published at Al Fin

Brasil Drills Deep and Often For Rich Offshore Oil Deposits: Tupi

Petrobras’s drilling of a seventh well in the Tupi area (earlier post) confirmed the light oil potential in the pre-salt reservoirs, located in ultra-deep Santos Basin waters. The new well, called 3-BRSA-821-RJS (3-RJS-674) and informally known as Tupi Alto, is located in the Tupi Evaluation Plan area, at a depth of 2,111 meters (6,926 feet) below the water line, nearly 275 km off the coast of Rio de Janeiro, and 12 km northeast of discovery well 1-RJS-628 (1-BRSA-369).

The well was drilled in a higher structural position than the other wells in Tupi, and proved the discovery of light oil via a cable test. The sample obtained in the test presented lighter oil (about 30 degrees API) than the average of the oils found in the other Tupi wells (about 28 degrees API).

Light crude oil—i.e., with a high proportion of light hydrocarbon fractions—is valued more highly than heavier crudes because it can yield a higher percentage of gasoline and diesel fuel when refined. _GCC

GCC
Brasil's offshore drilling efforts are being financed by George Soros, with the help of US President Obama and $2 billion in US loans. If may seem odd that Mr. Obama is supporting deep offshore drilling off the coast of Brasil, while attempting to stop all offshore drilling off the coast of the US. The inconsistency may have to do with Obama's friendship with Mr. Soros, or it may be a bid for future financial and political connections with Brasilian factions. The contradiction allows Mr. Obama to proceed with plans for energy starvation in the US, while doing nothing to obstruct the overall magnitude of offshore oil drilling worldwide.

In fact, Mr. Obama's moratorium of oil drilling -- if upheld by a more activist federal court -- will help George Soros to pull expensive and difficult to schedule drilling rigs from the Gulf of Mexico down to Brazil and other sites of interest to Mr. Soros. This small complication in Obama's "feel good" attempt to insure the safety of offshore drilling in the Gulf of Mexico will have to be eradicated from the popular media. We must move on, by all means.

Offshore oil drilling will take place -- even if the US chooses to forego its own rich deposits of offshore oil. Spills will take place -- and most national oil companies will care a lot less about the ecological impact of oil spills than the US population cares about its own shores.

Mr. Obama's apparent "payback" to a wealthy campaign contributor makes it clear what is important to the man. Himself and his destiny. Nothing else exists.

Eagle Ford: "Hundreds of Billions Worth of Oil and Gas"

New seismic technologies allowed prospectors to find liquid hydrocarbons in shales, even though the plays are deep and narrow – 12,000 feet down and usually only a few hundred feet thick. To efficiently drill these finds requires so-called "horizontal drilling," where rigs first must bore down to the oilfield and then veer sideways through it. The combination of these new technologies is releasing huge amounts of liquid hydrocarbons in the Eagle Ford.

Consider just one company's recent results. On April 7, EOG Resources announced drilling results from 16 test wells drilled across a 120-mile trend. Yes, that's right – a 120-mile trend. Based on the initial results and a core analysis, EOG believes it will produce 900 million barrels of crude from these wells over the next decade.

Mark Papa, EOG's CEO, says of the discovery: "We believe the South Texas Eagle Ford horizontal crude oil play will prove to one of the most significant United States oil discoveries in the past 40 years." _DailyWealth

Eagle Ford, a new shale oil discovery in South Texas, looks as if it may prove to be quite exceptional. Besides being a rich field of shale gas, Eagle Ford is one of the rare shale gas fields to also contain significant liquid hydrocarbon.

You need to understand one critical thing about the Eagle Ford play in South Texas: It holds liquid hydrocarbons, not just gas. And there's a lot of liquid in it, not just a little.

So-called "condensate" is the holy grail of the natural gas business. It refers to the amount of liquid (think butane) that's mixed in with the gas that's trapped in "tight" shales.

Shale gas plays have been the driving force in the onshore oil and gas business for the last decade. You might even have heard of some of the big fields by now: Barnett, Fayetteville, Haynesville, and Marcellus.

Shale plays are big, rich resources... but they normally hold only a little condensate. Eagle Ford is proving to be a notable exception – it is rich in condensate. More information about the size of the field and the volumes of condensate and gas is coming out almost every day now, and the numbers get better and better. A year ago, only a dozen drilling rigs were working across the entire play, which stretches across more than 30 counties. Today, more than 50 rigs are drilling well after well.

Judging by the pace of the drilling and the production rates of each new well, these 50 drilling rigs should allow production to grow to nearly 40,000 barrels of oil per day within the next 24 months. That's roughly $1 billion worth of oil per year at current prices.

Keep in mind... this is just from the handful of rigs working Eagle Ford in 2009. Those estimates don't include the value of the gas that will also be produced. And those estimates don't take into account the hundreds of additional rigs that will be put to work. Oil production is going to ramp up quickly.

I expect Eagle Ford to yield more than $2 billion in oil and gas by 2013 and to increase steadily for at least 20 years. These numbers mean Eagle Ford will probably produce hundreds of billions worth of oil and gas over the next 30-40 years. _DailyWealth

It is growing increasingly clear that the Obama administration is not serious about the development of domestic hydrocarbon resources. This lack of seriousness on the part of the nation's government puts the US at a serious disadvantage -- and makes America increasingly vulnerable to foreign oil producers, often state supporters of terrorism.

Two Timely Articles from OilPrice.Com on Producers Moving from Gas Production to Oil

Texas Acquisition Shows Shift of Gas Producers to Oil Investment


SandRidge Energy’s agreement this week to acquire Arena Resources, a producer of conventional oil in West Texas, for $1.6 billion is the latest example of natural gas companies seeking to balance their portfolios with more oil as the two resources decouple in price.

Natural gas prices have fallen more than 25% this year to below $4 a million British thermal units while oil prices have risen 8% and are now testing the $85 a barrel level, with some analysts forecasting $90 to $100 a barrel for later this year. The price ratio between the two fossil fuels has widened to more than 20-to-1 after staying closer to 10-to-1 in the past, even when oil rose to $147 a barrel.

SandRidge CEO Tom Ward said last month at the Howard Weil Energy Conference that companies can make “10 times more money” producing oil rather than gas. SandRidge has been acquiring oil properties over the past two years to achieve greater balance.

Gas accounted for 85% of SandRidge revenue at end-2008. Currently, oil represents only 28% of production but accounts for 54% of revenue.

The Arena Resources acquisition is SandRidge’s second in West Texas since November, when it spent $800 million to acquire properties from Forest Oil.

Other producers at the Howard Weil conference – including Noble Energy and Cabot Oil & Gas – said they were shifting investment to oil rather than gas.

And last week, Aubrey McLendon, CEO of Chesapeake Energy, which derives 90% of its revenue from natural gas, said at another energy conference that today's economics “just compel you to look for oil.”

Chesapeake is investing in an oil exploration and development project in the Rocky Mountains and hopes eventually to get a 50-50 balance in oil and gas production, McLendon said. The project in the Rockies consists of 700,000 acres in the Powder River Basin in Wyoming with an unidentified partner.

Natural gas prices have fallen as Chesapeake and others have invested heavily in production of shale gas. The companies now want to diversify to be better balanced even if the price equation shifts again.

McClendon said that using the horizontal drilling techniques pioneered in shale gas for oil production in the Granite Wash has revived that play and was bringing Chesapeake returns of 100 to 150%.

He said the company made a big mistake by not pursuing oil drilling in the Bakken Shale of North Dakota and Montana, where horizontal drilling techniques have been very successful.


Source: http://www.oilprice.com/article-texas-acquisition-shows-shift-of-gas-producers-to-oil-investment-252.html

By. Darrell Delamaide for Oilprice.com who offer detailed analysis on Crude oil, Geopolitics, Gold and most other Commodities,. They also provide free political and economic intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors. Visit: http://www.oilprice.com




Gas Producers Go to the Dark Side


It's finally happening. Gas producers are starting to crack.

With the natural gas to oil price ratio running at a nearly-unprecedented 21-to-1 ($86.80 per barrel for crude versus $4.12 per mcf for gas), gas producers are throwing in the towel. And switching over to the "dark side". Oil exploration.

Up until now, many die-hard gas producers had been sticking to their guns and continuing to drill gas plays. Particularly shale gas, where producers claimed economics are still attractive. Even at current depressed gas prices.

But times are changing. Last week reports emerged that gas-major Chesapeake Energy has leased 700,000 acres in the Rocky Mountains. The aim? Drilling for oil.

Chesapeake CEO Aubrey McClendon was quoted as saying bluntly, "The economics just compel you to look for oil rather than natural gas right now."

Elsewhere, other gas producers are making similar moves.

Last week, Texas-focused gas producer SandRidge Energy announced a $1.5 billion dollar takeover of oil producer Arena Resources. This comes after SandRidge CEO Tom Ward recently admitted to analysts at a major energy conference that producers can make "10 times the money" drilling oil wells as opposed to natural gas.

Even shale plays are taking on a "wet" flavor. The Eagle Ford shale has become the darling play in America, with most analysts acknowledging its superior economics. The reason? Largely, the liquids that generally come along with gas from Eagle Ford wells. Which fetch oil-like prices (or better).

As gas producers continue to seek oil entry opportunities, there will be steady upward pressure on prices for oil assets (which have already appreciated significantly this year).

There may also come opportunities in purchasing unloved gas properties. But only for those companies with the foresight and financial fortitude to hold on for the months or years until prices turn.

There will be a select few winners from this game. Keep watching this space.


Source: http://www.oilprice.com/article-gas-producers-go-to-the-dark-side-256.html

By. Dave Forest for Oilprice.com who offer detailed analysis on Crude oil, Geopolitics, Gold and most other Commodities,. They also provide free political and economic intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors. Visit: http://www.oilprice.com

$80 Barrel Oil Price Drives Oil Discovery, Production

Update March 31: More evidence here and here that large oil producers have been holding back on production until they were certain that oil prices would stay above $70 a barrel. As long as oil remains close to $80 a barrel, large OPEC and non-OPEC producers can justify the expense of new exploration and production.

Big new oil and gas discoveries by US and Mexico in the waters of the Gulf of Mexico are sparking increases in national oil production for the first time in years.

New discoveries across Africa combined with $80 oil is drawing more foreign producers, including more Chinese producers.

Even countries not known for their oil, such as India and Colombia, are finding new oil thanks to new discovery efforts. In fact, Colombia may overtake its unruly neighbor Venezuela in oil production within 10 years.

New Iraqi reserves and production threaten to drop a glut of oil supply on the global markets. And Iraq has just gotten started.

Brazil is bursting with offshore oil, creating many of the internal problems that oil-rich states are famous for.

Canada is rapidly becoming one of the world's richest hydrocarbon producers, and is making new oil discoveries all the time.

Much of the new oil will cost more to produce, perhaps placing a floor of $60 a barrel under such new production. But only a total idiot expects technology to sit still while there is money to be made. Such price floors will be tested and eventually broken.

The real threat to oil supplies is political -- as in Obama Pelosi reich energy starvation. Having succeeded in beginning to break down the advanced US biomedical industry, the Obama Pelosi reich will eventually get around to every aspect of the US economy. Energy starvation has always been a long term goal of the O P reich. EPA policies declaring CO2 a dangerous pollutant are merely the bare tip of the spearhead of the OP thrust to starving US industries of fuel.

The future of advanced western technologies that could lead to a "singularity" or to "the next level" all depend upon the capacity to bridge the inevitable geopolitical turbulence that is coming. If the western nations lack the "depth" to sustain the losses that rapid and violent change is bringing to the world, they will be lost to the future. It is not a game that can be reset and started over.

Still A Lot More Oil Where That Came From

.....nearly two-thirds of crude still gets left in the ground. So oil companies are raising the ante, investing billions of dollars in cutting-edge technology to increase the amount of crude they can tap.

The potential rewards are huge: Raising the average recovery rate world-wide to 50% from 35% would boost the world's recoverable oil by about 1.2 trillion barrels -- equal to the whole of today's proven reserves, the International Energy Agency says. _WSJ

For more on how the oil companies plan to go back time and again to retrieve yet more oil from old wells, read the whole article above. Since the oil dictatorships of MENA, Russia, Africa, South America, etc. have shut out the large multinational oil companies, the companies have decided to get what they can where they can. Certainly after having your assets nationalised by creeps such as Chavez, Putin, and Morales, oil companies can be forgiven for being shy around the bloody dictators of the world.

Third world oil sheikhs and dictators are unwilling to invest in advanced technologies of oil exploration, drilling, and recovery. They will try to induce western and Chinese companies to re-invest in their dilapidated infrastructure, but how many times will the high tech companies allow themselves to be fooled?

Regardless, sometime within the next 10 to 20 years, alternative supplies of fuels will come online that will start to price most petroleum products out of the fuel markets. All that we are asking of current oil, gas, bitumen, kerogen, and coal fields is that they bridge us over the next 20 years or so.

Looking For Oil Under the Lava Flows--New Oil Exploration Technology Opens New Frontiers

Huge quantities of oil lie in sediments that have been covered by volcanic activity over hundreds of millions of years of geologic upheaval. New methods of "seeing through" lava flows on the ocean floor--to the rich sediments below--are bringing previously hidden regions of the planet's undersea surface into the oil exploration game.

The scientists, led by Professor Robert White, FRS at the University of Cambridge (UK), also developed a new method of seeing through the thick lava flows beneath the seafloor to the sediments and structures beneath. The technique is now being employed to further oil exploration of the area which was previously restricted by the inability to image through the lava flows.

The research was funded by a university-industry research group, which included Cambridge and Liverpool Universities, Schlumberger Cambridge Research Ltd and Badley Geoscience Ltd, with major funding input from WesternGeco, the Natural Environment Research Council, the Department of Trade and Industry, and eight oil companies.

...The researchers’ findings [...] have implications for oil exploration in the region. Large volumes of oil have already been discovered (and are being extracted) in the sediments under the seabed between the Shetland Islands and the Faroe Islands. If these same sediments extend westward towards the Faroe Islands, as geological models suggest they do, there may be more oil to be found.

Conventional exploration techniques have not been able to penetrate the thick layers of lava flows that poured over them at the time the North Atlantic broke open. Techniques developed in conjunction with the mapping research enable the penetration of the molten rock layer to the sediments and structures that lie beneath them.___GCC

Peak Oil theory is based upon ignorance: Ignorance of the true extent of oil formations under most of the surface of the Earth. Only North America has been fairly well explored for oil, and even there, large new fields are still being found. The age of oil is far from over.

Which is a good thing, since neither renewable energy nor nuclear energy are ready to provide the fuels and power currently being provided by oil and gas. Oil will be absolutely necessary during the next few decades, to bridge into the new era of renewables, safe fission, and hopefully controlled fusion.

Big Money Abhors a Vacuum--Wildcatters Enter the New Oil Rush

Big oil companies have reduced their oil exploration efforts since the 1980s. That means there is big money to be made in finding new oil fields--and the small wildcatters are the ones who are going to be cashing in. Venture capital is beginning to find the wildcatters with the best chances of hitting crude.

The American oil patch, once left to languish during an extended period of low oil prices, is on the rebound. Wildcatters like Mr. Bryant are ready to pounce. With oil prices now hovering around $60 a barrel — three times higher than they were throughout the 1990s — the industry is expanding at a pace last seen decades ago.

“The oil industry has changed dramatically in the last 20 years,” Mr. Bryant says. “Barriers to entry have dropped significantly. It doesn’t matter if you’ve been in the business 100 years or 100 days.”

Easily available capital and technology, once the preserve of traditional oil companies, are reordering the business. Investors are lining up to finance energy projects while leaps in computing power, imaging technology and collaborative online networks now allow the smallest entities to compete on an equal footing with the biggest players.

“There’s a lot of money out there looking for opportunities,” said John Schaeffer, the head of the oil and gas unit at GE Energy Financial Services. “It seems like everyone wants to own an oil well now.”

...Instead of looking for new petroleum sources, the big oil companies now spend more money on strategic and financial maneuvers like acquisitions and share buybacks, according to analysts. Many have also bolstered dividend payments in order to please their shareholders. A decade ago, oil companies spent $2 on exploration for every $1 spent on acquisitions; today, it’s the other way around. Exploration, which once took a place of pride among major oil companies, now takes a back seat.

But analysts warn that the industry should be expanding exploration, because much more energy will be needed in coming years. According to the International Energy Agency, the world will be consuming 115 million barrels of oil a day by 2030, up from 85 million today.

“It’s hard to explain why exploration isn’t getting more attention,” Mr. Smith said. Oil companies, he said, “have become more risk-averse.”

For whatever reasons Big Oil is forgoing exploration, that reluctance has opened a door to entrepreneurs like Mr. Bryant. Cobalt, taking advantage of the lush financing available to energy start-ups, has secured $600 million from investors like Goldman Sachs and Carlyle/Riverstone, a private equity firm. It is about to secure an additional $600 million to $900 million from its investors.

....Finding, developing and operating costs in the Gulf of Mexico run below $20 a barrel. With oil prices at $65 a barrel, if the company finds a field that flows at 50,000 barrels a day, it can potentially earn more than $2 million a day — or $800 million a year — from a single field. “The whole game is to put a string of those together,” Mr. Bryant says.

....Cobalt is looking for oil reserves ranging from 100 million to 300 million barrels. While a big discovery can instantly earn the company billions, there is no guarantee that the company will find oil at all. “How are you successful in oil and gas exploration? It doesn’t need a whole committee,” said Mike Lentini, a 49-year-old geologist who spent 25 years looking for oil at Shell and recently moved to Cobalt. “If you go the consensus path, you get the average result rather than what is truly path-breaking.”

On a recent afternoon here, Mr. Byrant, who had just returned from a visit to the Middle East, said Cobalt would never be able to compete with Big Oil everywhere. But he said independent companies now had more than a fighting chance.

“Exploration has become a game of super technology,” he says. “That’s a lot different from the early days of the industry when wildcatters would just drill a well, cross their fingers and hope for the best.”

Source

For more on the promise of new oil exploration technologies, see here, here, here, and here.


Such independent operators could not operate in most "oil countries", where corrupt government leaders hover--waiting to pounce on new finds and nationalise them to enrich their Swiss bank accounts.

Hat tip instapundit.

Oil Exploration from the Sky: Fast and Wide

As time goes by, better and better methods for finding mineral wealth, including oil, will be developed. This TechReview article reports on a new method of aerial search for oil reserves:

A new airborne technology for mapping oil fields could locate new oil reserves by drastically cutting survey costs, and help companies identify untapped oil within new reserves.

Las Vegas, NV-based startup eField Exploration recently completed a survey of existing oil fields in Texas in which it revealed extensions of these fields into areas that traditional methods did not spot, according to company president Ed Johnson. Drilling to confirm the findings will likely begin soon, he says.

The new method uses existing electromagnetic imaging technologies in a novel airborne system that can quickly cover large areas, thus reducing costs. It also potentially reduces the environmental impact of exploration by eliminating the need to bulldoze wide roads for the heavy equipment used in seismic surveys.

According to Dan Burns, a research scientist in MIT's earth resources laboratory, while seismic surveys are currently by far the most common method of imaging oil fields, electromagnetic (EM) imaging is gaining in popularity because it is more reliable. Electromagnetic imaging is a more direct way to detect oil than seismic surveys, since it can measure differences between oil and water, something seismic methods can't do. "There's clearly a move more and more toward electromagnetics," Burns says. "In general, seismic techniques are responding to differences in the rocks themselves, as opposed to fluids, whereas EM methods are much more sensitive to fluids."

.....Because their method reduces costs, eField is also exploring another potential benefit: rapidly scouting for potential oil deposits in new areas or in areas that have already been mapped but with inadequate methods due to high costs. By quickly covering large areas (the Texas survey took in 3,100 miles) and generating maps in weeks instead of months, the new airborne technology can cut costs per "line mile" for large areas to about $100, Johnson says, rather than the hundreds of thousands of dollars per mile he says seismic surveys cost.

Source.

A person almost needs to be totally oblivious to the real world, to believe that most of the world's oil reserves have already been located, much less extracted. Fixation on earth-changing catastrophes is a natural stage in human development, but persons who get stuck in that fixation can easily lose touch with reality. This is true for religious apocalyptics as well as ideological apocalyptics.

There is plenty of room in the real world for those who want to solve problems.

Suffering Peak Oil Fatigue? Prepare for a New Oil Glut!

Just when you thought it was safe to invest in alternative energy, someone like Len LeShack comes along and turns the world of oil topsy turvy all over again.

"There are still hundreds of reservoirs of conventional oil to be found in Alberta, and thousands to be found in the United States, but they are unlikely to be found with conventional exploration methods," says LeSchack.

The president of the privately owned Hectori Inc. of Calgary observes from his experiences.

"The industry is still basically using exploration techniques I learned at university in the 1950s. We geologists worked a lot on intuition, and then used seismic to back it up. Seismic is fine, but seismic can only find what seismic can find." Source.

And LeShack knows exactly how to find these new oil reservoirs. In fact, he wrote the book on the topic with Dietmar Schumacher. Articles discussing some of these new exploration techniques can be found here, here, and here.

This is not far-fetched speculation, like the ideas of Thomas Gold probably are. This is hard headed innovative thinking in oil exploration. This is the last sort of thing that peak oil belivers want to hear about right now.

Peakers can only hope that Al Gore is elected US President soon, because Mr. Gore would certainly squelch these hopeful ideas quickly and thoroughly. The illusion of peak oil can be maintained so long as the people in control put strict limits on oil exploration and development. In the US, that is done through environmental restrictions. In Russia and other third world countries, it is done out of laziness, decadence, and the lack of desire to do anything that may drive oil prices down and stimulate other countries to find oil within their own borders.

So, is it really peak oil time? Certainly, as long as you can keep the lid on.